Geopolitical tensions are no longer distant flashpoints—they are fast becoming balance-sheet risks and pressing boardroom concerns. For India Inc, wartime uncertainty is showing up in spiking oil prices, volatile currencies and disrupted supply chains. This is impacting overall costs, demand, and operational continuity.
While the IMF has raised India’s GDP growth forecast for FY27 by 10 basis points to 6.5% in its April outlook versus its January estimate, this is still below the 7.6% growth estimate for FY26. Analysts at Crisil Ratings warn that India’s FY27 GDP growth rate could moderate to 6.8%—and potentially to 6.5%—due to the ongoing war in West Asia.
Against this backdrop, Indian companies are being forced to rethink resilience—not as a defensive tactic, but as a strategic lever, Mohit Malhotra, global CEO, Dabur says. As former RBI Governor Shaktikanta Das recently cautioned, the global economy resembles a “chakravyuh”—a complex, multi-layered formation where entry is easy, but exit demands strategy and precision. For Indian companies, that metaphor implies navigating wartime uncertainty by preparing for a chain reaction of risks unfolding simultaneously.
Agile Adaptation
Malhotra says that his firm now has a rolling business plan that is revisited every year. “The days of five-year plans or even two or three-year plans are over. In these dynamic times, assumptions regarding business growth, inflation and currency have to be looked at frequently. This allows us to be agile and respond quickly to an evolving situation,” he said.
For instance, in FMCG, the outlook for FY27 by most firms has shifted from volume-led growth to price-led growth. Companies are taking staggered price hikes to tide over input cost inflation triggered by the Iran war. Some firms are also slowing launches as well as key capital expenditure plans for the year to deal with the immediate shortage around commercial gas.
Sectoral Stress Tests
In the case of automotive companies, March production numbers have held up, said SIAM President Shailesh Chandra, despite supply-chain disruptions. “April will be a litmus test. We have witnessed stress levels in the supply chain in April, as we did in March. While we are working with the government to deal with the shortage around propane and LPG, industry players are monitoring developments closely,” Chandra said. Forging majors such as Ramkrishna Forgings say it has diversified its export market base before the ongoing Iran war to cushion against geopolitical risks. The company set up a manufacturing facility in Mexico in 2024 to cater to North American customers, leveraging the United States-Mexico-Canada Agreement (USMCA).
Domestic airlines, on the other hand, have reduced flights to the Middle East, hiked fares and shifted to alternate international destinations such as South East Asia where demand remains stronger, executives said. To support the aviation sector, the government has reduced landing and parking charges by 25%. It has also put a 25% cap on the increase in domestic ATF prices and temporarily relaxed pilot duty time regulations to accommodate longer flight paths, experts said.
Ashok Chandak, a veteran semiconductor and electronics industry leader, who is president of industry bodies IESA & Semi India, said the ongoing geopolitical tensions had reshaped the tech and telecom supply chain—from efficiency-led globalisation to resilience-led regionalisation.
“We are seeing ‘friend-shoring’, export controls, and strategic stockpiling becoming the new normal, especially in semiconductors and telecom infrastructure. Companies are also increasingly adopting dual or multi-sourcing strategies for critical components. While this raises costs, it significantly reduces supply risk and business disruption,” he said.
In the case of engineering, procurement and construction (EPC) companies, the risks are even greater, given their exposure to the Middle East. KEC International, for instance, derives around 25% of its order book from West Asia. Industry leader L&T has about 37% of its order book coming from the Gulf region, sector analysts said.
Vimal Kejirwal, MD & CEO, KEC International said the company was diversifying its sourcing across geographies, increasing reliance on domestic procurement and maintaining strategic inventory buffers for critical inputs to mitigate supply-side risks. On the energy front, the company had enhanced operational flexibility through multi-fuel systems, induction-based processes and close monitoring of energy consumption.
“On the logistics front, we have adapted by identifying alternate route options and working closely with logistics partners to manage lead times and ensure continuity of supplies,” Kejriwal added.